Gary Bettman insists the NHL will recoup the $140-million (all currency U.S.) it paid for the Phoenix Coyotes, but questions linger.
The commissioner's rosy financial picture does not appear to include the money the league has paid to cover the Coyotes' losses since it closed the sale on Nov. 2. Also, $30.6-million was set aside from the purchase price to cover what the NHL put into the team last season and this season. That $30.6-million appears to be insufficient.
According to court documents, the Coyotes lost more than $60-million last season, due to poor ticket sales and enormous debt service. The most recent financial statements filed with the U.S. Bankruptcy Court show the Coyotes lost about $5-million in October, the first month of the 2009-10 regular season, bringing its total loss for the first four months of this fiscal year to $15.9-million.
Ticket sales continue to be less than 10,000 a game, so the losses in November and December will be similar to, or worse than, the $5-million lost in October. It looks as if the team will lose at least $50-million by the end of this season.
But the league's governors seemed unfazed. The few who spoke to the media when the annual meetings ended yesterday all said they were satisfied with Bettman's explanation of the Coyotes financial mess.
They said they had no reason to doubt Bettman's assertion that once the league sells the team (there is a letter of intent from the Ice Edge Holdings group), it will recoup the $140-million it paid in a bankruptcy court auction.
"I think the commissioner has got this well in hand," said Boston Bruins owner Jeremy Jacobs, who is the chairman of the NHL board of governors. "I don't think there's any money going out from the Bruins or anybody else.
"Talking as a Bruin, that's the only interest we have in it, that we're not giving up any funds for it. We're happy with the way it's being handled."
The Coyotes will also receive a full share from the league's revenue-sharing plan even though they do not qualify for one because of their lagging revenue. This season's full share is expected to be between $10-million and $11-million, which is down from last season because there will be more teams taking cuts from the pool. Bettman said the governors did not vote on the matter, but no one objected.
Bettman said after the meetings that he hopes to strike a deal with Ice Edge, a group of Canadian and U.S. businessmen, in 30 days. If he does not, the commissioner said, he will move on to another buyer.
"Well, we're dealing with expressions of interest but we're not in negotiations with anyone else," he said. "But we're not discouraging people to continue their efforts to express interest."
Before the meetings, more than one governor said the Coyotes discussions would lead to questions about the NHL's intentions regarding a second team in Toronto or in other Canadian cities such as Winnipeg and Quebec City. But in the end, no one broached the topic.
"We didn't have the macro discussion about relocation or expansion," Bettman said. "Obviously, we're trying to ensure that the Coyotes stay in Glendale. And if that doesn't work, then we'll have to have a Plan B. But that's not something we're working on now."
If Ice Edge buys the Coyotes, the governors will have to make a decision on the group's plans to play five games per season in Saskatoon. Bettman said no decision on the matter is close and the governors appear to be split on the idea.
Calgary Flames president Ken King dismissed the notion, saying: "Based on what we heard, it is not something that I think is likely to happen."
However, Edmonton Oilers president Pat LaForge was more receptive on a general basis, although he was careful to say he was not talking specifically about Saskatoon.
"A bigger issue is, how do you deal with satellite markets?" he said. "Probably the best answer is: Not as a one-off. You need a plan. We didn't get there today, but we will."
Both the adoption of games in Saskatoon and any change in the revenue sharing formula are potentially subject to approval by the NHL Players' Association.